Union Sues Over 403(b) Losses from TPA

The Bayport-Blue Point Teachers’ Association claims the Bayport-Blue Point School District ignored its warnings that Horizon Benefit Administration was mismanaging the accounts it administered between January 2001 and September 2004, Newsday reported. The union sent a letter in June 2002 detailing missing and incorrect participant statements, a lag time in deposits to the retirement accounts, and what it called “a clear and consistent pattern of incompetence.”

The lawsuit charged that the district failed in its responsibility to 108 employees by hiring Horizon without first properly checking the credibility of the firm, according to the Newsday report.

Horizon’s controlling officer, Harold Hopkins of Aurora, Ohio, was later accused of misusing pension funds from 40 school districts and private businesses across the country, and was indicted in Ohio last month on unrelated securities fraud charges, Newsday reported. Last September, Ohio issued a temporary restraining order against Hopkins and his wife. Their assets and the accounts of Horizon and three other companies he ran were frozen. The state appointed a special master to oversee the company’s operations.

On August 30, a grand jury indicted Hopkins on 56 counts of security fraud and impropriety, alleging Hopkins misrepresented the risk and liquidity of stocks he sold.

In February, the Bayport-Blue Point employees received refund checks from Horizon, but were told the payments were 10.3% short because of the alleged embezzlement. The amounts missing per person range from several hundred dollars to about $8,000, according to the news report.

The lawsuit asks the district to make up the money, interest and tax benefits lost to employees, and pay the union’s legal fees.